M&T customer deposits declining
Prior to its switchover of People’s United accounts that prompted complaints and scrutiny, M&T Bank saw Connecticut deposits drop at a larger number of People’s United Bank branches than those where M&T recorded gains.
The Federal Deposit Insurance Corp. tallies bank deposits annually based on totals each June. In its newest report, the FDIC reported a $4.2 billion drop in M&T deposits in Connecticut from the combined total for M&T and People’s United as of June 2021.
That allowed Webster Bank to leapfrog M&T to become Connecticut’s second largest bank by customer deposits, after Bank of America. FDIC credits Bank of America with having 25 cents on every dollar on deposit in Connecticut, for $44.7 billion in total, with Stamford-based Webster at $25.9 billion in customer deposits as of June and M&T having $24.8 billion.
The large majority of banks in the New York and Connecticut markets posted deposit gains over the intervening year — in Connecticut none more so than JPMorgan Chase which added $1.4 billion to its state total to push it slightly above the $10 billion threshold for a 16 percent gain.
Across all banks, customers tacked nearly $580 million to their aggregate accounts in Connecticut to push the total to a record $179 billion — roughly $39 billion above June 2019 in advance of the COVID-19 pandemic.
M&T acquired People’s United last April, picking up $53 billion in customer deposits across Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine. As of June, however, M&T’s deposit total was down by $9.6 billion over 12 months from the combined total it and People’s United had reported separately in June 2021. The decline was dominated by New York and Connecticut branches, with the possibility that some customers had moved accounts in advance of the April acquisition date.
Deposit levels can be influenced heavily by companies and municipalities changing banks, or branch closures that prompt banks to reassign accounts to another location for geographic or bookkeeping purposes.
That appears to have been the case with a huge chunk of People’s United’s deposits on record with the FDIC. M&T estimated a $3.9 billion decline in deposits at the People’s United headquarters branch in downtown Bridgeport, reducing the total there to $3.1 billion as of June.
Across five more retail branches in Bridgeport, however, M&T recorded a 4 percent gain in combined deposits, suggesting customers in People’s United’s home city stuck with their new bank in the early months after the acquisition.
In about 90 of Connecticut municipalities where M&T had branches in June, however, the company reported deposits dropped in 63 percent of those cities and towns.
Former People’s United customers continue to protest the conversion of their accounts — and got a major new ally on Friday morning. U.S. Sen. Richard Blumenthal, D-Conn., demanded M&T compensate any customers that had automated bill payments rejected or had difficulties otherwise accessing their accounts.
Blumenthal has requested a probe by the U.S. Consumer Financial Protection Bureau and the Federal Reserve on M&T’s preparations for the switch, alongside senators from Massachusetts and Vermont.
Attorney General William Tong had announced his own query days before.